Golden Gate Gets 20% Holding in Zale for $150M Loan
May 23, 10
Golden Gate Capital, a Cayman Islands registered investment firm that made a $150 million loan to struggling American jewelry retailer Zale, has exercised its right to purchase up to 6.4 million shares of Zale’s common stock and now holds a 19.9 percent stake in the company, according to a Thursday SEC filing.
On May 10, Z Investment, on behalf of GGC, made the loan and received the share warrants. It also received warrants to purchase up to 4.7 million after the first meeting of Zale’s’ stockholders. The additional shares represent a 14.6 percent holding.
This will give GGC a 34.5 percent holding in Zale.
The loan, which matures in five years, also gave the fund two representatives on Zale’s board of directors and receives warrants for 25 percent equity stake on a fully diluted basis.
The two new board members are Stefan Kaluzny and Peter Morrow.